This proposal investigates the mechanisms through which additional prefrontal (RFC) activity compensates for medial temporal (MTL) declines in long-term memory with age. I propose three event-related fMRI experiments to identify the potential for increased RFC to support successful performance in domains of age-related impairment. Experiment 1 will establish whether the increased RFC activation is linked to decreased MTL function using both neuropsychological and morphometric measures. A pattern whereby those elderly adults with poorer MTL function activate RFC more than those with better MTL function provides support that additional RFC activations can compensate for poor MTL function with age. Experiments 1 and 2 address age-related declines in relational encoding and the ability to discriminate false from true memories. Because these tasks load heavily on MTL, we expect that the elderly will increase RFC relative to young adults for successful trials. Experiment 3 explores whether the elderly achieve age-invariant performance when neural regions are less affected by aging. For successful self-referential encoding, age-related compensation should be achieved by increasing medial RFC activation in the elderly.